Service Trends by Barb Levisay, Owner, Marketing for Partners

Microsoft Partner Pivots To Meet Cloud Realities

While partner adoption of the cloud may have started slower than Microsoft had hoped, the transformation seems to be fully under way. With 125,000 members in the Cloud Essentials program, SMB partners are facing an ever-more crowded field.

More competition accelerates the need for cloud partners to build new revenue models. For those partners who took on the cloud early, lessons learned include the need to demonstrate competency and invest in deeper, long-term customer relationships.

Everything Must ChangeFor 20-plus years, Greenwich, Conn.-based Lighthouse Technology Partners served local businesses as a traditional IT service provider. Most of the Lighthouse customers were 20- to 50-person organizations that needed IT support services from desktop to datacenter -- all on premises.

"Three years ago, a company with 35 employees needed an enormous amount of IT support," said Brian Desrosier, president of Lighthouse Technology Partners. "E-mail, voice, availability, security and storage were all human resource-intensive."

Seeing its clients' needs evolve, Lighthouse started offering hybrid solutions which transformed over time to a full cloud services practice. "Our practice today is completely aligned with Microsoft corporate direction," Desrosier said. "Absolutely everything is different in my business...in just a couple of years."

The fundamental reality is that customers don't need as much support from their IT service providers when they move to the cloud. For those partners who have transitioned over time, keeping on-premises customers and adding cloud customers has eased the transition.

Stepping Up Relationships Since cloud customers require fewer of the traditional IT services like security, backup and upgrades, each partner needs a larger client base to make ends meet. And with the increasing number of cloud partners chasing those deals, competition is especially tough in SMB.

"We have realized that we need many more customers and we need them to be bigger," Desrosier noted. "We have to seek out clients who place value in and have a need for our competencies."

Treating cloud opportunities as a two-step sales cycle, the Lighthouse team works to prove their value during the initial migration to Office 365 or SharePoint Online. Once they have gained a position as a trusted advisor, they build on the relationship with training, workflow and SharePoint design services.

Reaching Further Chasing more and larger opportunities means working outside the region for most partners. Historically, Lighthouse customers were local businesses, but vertical opportunities are expanding the company's base. "We can't just work on word-of-mouth referrals like we did a few years ago," Desrosier said. "We have to reach outside our boundaries."

To expand its industry and geographic reach, Lighthouse has made significant investments in proving its value to education and nonprofit organizations. Most of these larger opportunities have long, expensive sales cycles. Multiple demos, sandbox environments and proof-of-concept engagements take consultants off billable time, but have the potential for big payoffs.

Greater alignment with Microsoft sales reps in the enterprise and education groups has also helped open doors for Lighthouse. "We are working to prove our value to the Microsoft account manager as well as the customer," Desrosier said. "The Microsoft sales team is an important success factor. More partners are clamoring to get their attention, so you have to jump at the opportunity to prove yourself."

The Tipping Point While Microsoft is surely happy that we've reached the tipping point for cloud adoption, partners have to figure out how to adapt to the new realities. Not all will make the transition successfully, but there are plenty of partners who are thriving. An industry that once rewarded technical generalists now requires specialization and industry expertise for survival.

How are you making an impact with cloud services? Add a comment below or send me an e-mail and let's share your story.